The Pope Endorses Tax Choice

[Wikkiwallana]

So what happens when people start over funding one thing and under funding another? How are things stabilised?

What about situations, such as sudden economic disaster or natural disaster, that need suddenly massive amounts of funds to help mitigate?

Logistically speaking, at anytime throughout the year you could go directly to the EPA website and submit a tax payment. They'd give you a receipt and you'd submit all your receipts to the IRS by April 15.

Tax choice would create a market in the public sector. What would you consider to be an overprovision or underprovision of environmental protection? If there's an overprovision of environmental protection...then why would you go to the EPA website to make a payment? If you believed that we had an adequate supply of environmental protection...then why would you demand more?

Except people already overfund things. Charities have a real problem with earmarked donations, such as for relief of specific disasters, because the necessary money is achieved, and yet people still keep giving for that one cause, and they are unable to legally spend the money elsewhere. The money just ends up sitting there helping no one. And this is in the private sector you value so highly, where a market is already in place. The same thing will happen to the public sector under your idea.

[Xerographica]

Economists agree

Which ones, out of a matter of interest?

Eh, you didn't want to take my word for it.

There are two related problems...the free-rider problem and the preference revelation problem. The free-rider is solved by forcing people to pay taxes. That leaves us with the preference revelation problem. It helps to think of "preference" as another word for "demand" as in "supply and demand". The preference revelation problem is the idea that it's a problem that we have no idea how much you truly value national defense, public healthcare or environmental protection. Without knowing your true preferences for public goods...government planners have to guess what the supply of public goods should be.

Here are a few passages that discuss the problem...

Thus while Samuelson is technically on safe ground in his solution of the public goods problem, the assumptions required make the solution useless for policy purposes. But a reliance on aggregation through consultation, as Wicksell wants, offers a guarantee neither of theoretical efficacy nor of practical usefulness. Some of the debates and doubts about the states role in the economy that erupted in the 1960s and 1970s arose from these twin problems. - Meghnad Desai, Providing Global Public Goods

Wicksell (1882) was the first to focus on this failure of preference revelation, suggesting that it could be overcome in democratic societies, where voters can support politicians whose tax and spending policies meet their wishes. With mandatory acceptance of political outcomes, consumers have an incentive to reveal their preferences, suggesting an efficient provision of public goods. - Richard Musgrave, Peggy Musgrave, Providing Global Public Goods

If the individual is to spend his money for private and public uses so that his satisfication is maximized, he will obviously pay nothing whatsover for public purposes (at least if we disregard fees and similar charges). Whether he pays much or little will affect the scope of public services so slightly, that for all practical purposes he himself will not notice it at all. Of course, if everyone were to do the same, the State will soon cease to function. The utility and the marginal utility of public services (Mazzola's public goods) for the individual thus depend in the highest degree on how much the others contribute, but hardly on how much he himself contributes….Equality between the marginal utility of public goods and their price cannot, therefore, be established by the single individual, but must be secured by consultation between him and all other individuals of their delegates. - Knut Wicksell

But the Samuelson condition involves individual marginal rates of substitution. In order for the set of Pareto-optimal allocations to be known, it is necessary for each consumer to tell the government what his marginal rate of substitution is. But it may be in an individual's interest to give false information about his utility function. This is what has become known as the preference revelation problem. - John McMillan, The Free-Rider Problem: A Survey

Determining the efficient level of public goods requires knowing consumer preferences. That knowledge is often assumed as given in theoretical models of optimal provision, but obtaining it is a major challenge when it comes to actual policy. - Richard Musgrave, Peggy Musgrave, Providing Global Public Goods

During the decade of the 1970s, one new method appeared after another to solve the heretofore seemingly insoluble problem of inducing people to reveal their preferences for public good honestly. - Dennis C. Mueller, Public Choice: An Introduction

The large theoretical literature on incentive-compatible demand revelation was inspired in part by attempts to design preference revelation mechanisms for public goods which would avoid free riding and result in the optimal decentralized provision of public goods. The incentive-compatible demand revelation devices (ICDRDs) proposed by theorists create situations in which it is in the person's selfish interest to choose to reveal his or her true preferences for a good. - Robert Mitchell, Richard Carson, Using Surveys to Value Public Goods

One set of solutions assumes the existence of a government and concentrates on the problem of how the government can persuade consumers to reveal their utility functions honestly. - John McMillan, The Free-Rider Problem: A Survey

The demand-revealing process is the subject of much current research in public economics. It involves designing a special tax structure under which individuals cannot do better than correctly reveal their demands for the public good. Each individual pays a tax (or receives a subsidy) equal to the net loss (gain) in consumers' surplus that his public-good demand imposes on all the other individuals. - John McMillan, The Free-Rider Problem: A Survey

In his seminal analyses of public goods, Samuelson concluded that strategic bias implied that there was ‘an inherent political difficulty of ever getting men to reveal their tastes so as to attain the definable optimum’. This view led to widespread acceptance by economists for some time that true demand for public goods could not be determined. - C.D. Throsby, Glenn A. Withers, Strategic bias and demand for public goods

Expositions of welfare economics typically assume that the analyst possesses knowledge that is in no one’s capacity to possess. A well-intentioned administrator of a corrective state would face a vexing problem because the knowledge he would need to act responsibly and effectively does not exist in any one place, but rather is divided and dispersed among market participants. Such an administrator would seek to achieve patterns of resource utilization that would reflect trades that people would have made had they been able to do so, but by assumption were prevented from making because transaction costs were too high in various ways. A corrective state that would be guided by the principles and formulations of welfare economics would be a state whose duties would exceed its cognitive capacities. - Richard Wagner

Again,

1. Economists agree that taxpayers' true preferences are necessary to provide the optimal supply of public goods
2. If taxpayers had to pay taxes anyways, but could choose where their taxes go, then they would have no incentive to hide their true preferences
3. Therefore, tax choice would provide the optimal supply of public goods

[Wamitoria]

Economists agree

I'm merely an observer in this thread, but I must point out that the above two words should never be in the same sentence unless separated by the words "don't," "never," "can't," or the phrase "are unable to."

[Xerographica]

2 and 3. It works on the assumption that the value of public goods paid for by each taxpayer is the same as the value of the public goods received.

No, let's say that you hate everything the government does. It would be impossible for you to hate every single thing the government does equally.

Let's consider how much value you derived from three public goods...

Public good A: - 100 value
Public good B: - 50 value
Public good C: - 10 value

It's most likely that you're going to pay for Public good C. So however you spin it...less beneficial government organizations would lose funding and more beneficial government organizations would gain funding. This is why we say that in a market system, resources flow to where they create the most value. It's an ongoing process. As soon as Public good D came along you would give your taxes to it instead of to Public good C.

[Xerographica]

Economists agree

I'm merely an observer in this thread, but I must point out that the above two words should never be in the same sentence unless separated by the words "don't," "never," "can't," or the phrase "are unable to."

Well...yeah...kinda. But I mean, good luck finding a modern economist who doesn't agree with the concept of supply and demand.

[Merriwhether]

I've always supported the right of the taxpayers to decide where their money is going to go. I've also supported no taxes at all... but that's irrelevant (but does have a legitimate arguement). the Pope endorsing the idea does not in any way deter my support for the system. It's common sense, really, that we should be able to choose where our hard-earned money goes when we pay taxes to the state. It is ours, after all. We earned it, we should control it, no two ways about it. And people should also be able to choose not to control where it goes, just to appeal to everybody.

[Cosmopoles]

No, let's say that you hate everything the government does. It would be impossible for you to hate every single thing the government does equally.

Let's consider how much value you derived from three public goods...

Public good A: - 100 value
Public good B: - 50 value
Public good C: - 10 value

It's most likely that you're going to pay for Public good C. So however you spin it...less beneficial government organizations would lose funding and more beneficial government organizations would gain funding. This is why we say that in a market system, resources flow to where they create the most value. It's an ongoing process. As soon as Public good D came along you would give your taxes to it instead of to Public good C.

But the person who is paying for the public goods is not the same as the person who is receiving the public goods. If I choose to direct my taxes to unemployment benefits I don't see the direct benefit because I'm not unemployed. How do I know if the unemployed are receiving enough?

You and I spend the money that we allocate to groceries in an optimal manner because we are the direct recipients of our spending. We only buy the food we want in the quantities we require. But what you are advocating is that we buy each other's groceries. How do I know what food you want to eat? How do I know how much you need?

[New Chalcedon]

What happened to 'rendering unto Caesar?'

That only applies when convenient to the Church.

[Xerographica]

But the person who is paying for the public goods is not the same as the person who is receiving the public goods. If I choose to direct my taxes to unemployment benefits I don't see the direct benefit because I'm not unemployed.

As I mentioned in my OP...the state is the new god...and we put our lives in the state's hands. With religion, there's prayer and sacrifice. The prayer communicates your concerns/wants/needs and your sacrifice communicates the intensity of your concerns/wants/needs.

It's a matter of anxiety and uneasiness...the same principle behind insurance. If you're worried about losing your job...then you can help decrease your anxiety by giving your taxes to unemployment. If your family member has lost their job...then you can help decrease your anxiety by giving your taxes to unemployment.

All the money that unemployment received would reflect some information. It would reveal exactly how much society values that particular safety net. Right now there IS an exact amount that society values unemployment. How many people are worried about losing their jobs? How many people have been unemployed...and now are employed and are extremely grateful for the benefits they received while unemployed? Why wouldn't we want to find out what the actual demand is for unemployment benefits?

How do I know if the unemployed are receiving enough?

Why wouldn't the dept of unemployment benefits tell you? Why wouldn't your family member or friend tell you? Why wouldn't you know from the time when you were unemployed? This information is decentralized...and markets utilize far far far more decentralized information than non sequitur economies. Which is exactly why non sequitur economies are non sequiturs.

You and I spend the money that we allocate to groceries in an optimal manner because we are the direct recipients of our spending. We only buy the food we want in the quantities we require. But what you are advocating is that we buy each other's groceries. How do I know what food you want to eat? How do I know how much you need?

No, I'm advocating that we shop for ourselves in the public sector.

No two private goods provide you with the same exact benefit. It's the same exact concept with public goods. The difference is...with public goods...the benefit is shared. If you derive a lot of benefit from contributing to public education...then people who also value public education would also benefit from your contribution. And who else should be in charge of determining exactly how much money public education should receive if not the people who value public education?

But what if everybody who has received a public education is unemployed? Obviously that's not the case...but it's necessary that we think along these lines. If our taxes are being used to churn out people with degrees that have absolutely no relevance to the actual labor demands for our society...then that's a problem. And tax choice would reveal the extent of this problem because obviously unemployed people wouldn't be directing very much money to public education. Then, people who valued public education would have to figure out what has to be changed for public education to educate the public in such a way that the public actually benefits. If their changes generate more revenue for public education...then they are on the right track. If their changes generate less revenue for public education...then they are on the wrong track.

In a market system...when we give our money to an organization...we are saying that we want that organization to be able to use more of society's limited resources. We all gave our money to Bill Gates which is why he can use far far far more of society's limited resources than you or I can. But the system works because clearly we value how he is using society's limited resources. We value how he is using a good portion of our brightest minds. And if we stop valuing how he is using society's limited resources...then we'd stop giving him our money.

If we created a market in the public sector...then people would be able to use their tax dollars to indicate which government organizations should be using more of society's limited resources. Yes, Bill Gates definitely has more of a say than us...but that's because WE all agree that he SHOULD have more of a say than us. We all agree that we value how he is using society's limited resources in the private sector. So if we benefit from his freedom to indicate which private organizations should be using more of society's limited resources...then why wouldn't we benefit from his freedom to indicate which public organizations should be using more of society's limited resources?

Where does he think the bottleneck is in the public sector? Which link in the chain does he perceive to be the weakest? Markets allow resources to flow to where they create the most value. If we want far more value as a society...then we should create a market in the public sector. From my perspective, the absence of a market in the public sector is our weakest link.

[Cosmopoles]

As I mentioned in my OP...the state is the new god...and we put our lives in the state's hands. With religion, there's prayer and sacrifice. The prayer communicates your concerns/wants/needs and your sacrifice communicates the intensity of your concerns/wants/needs.

It's a matter of anxiety and uneasiness...the same principle behind insurance. If you're worried about losing your job...then you can help decrease your anxiety by giving your taxes to unemployment. If your family member has lost their job...then you can help decrease your anxiety by giving your taxes to unemployment.

All the money that unemployment received would reflect some information. It would reveal exactly how much society values that particular safety net. Right now there IS an exact amount that society values unemployment. How many people are worried about losing their jobs? How many people have been unemployed...and now are employed and are extremely grateful for the benefits they received while unemployed? Why wouldn't we want to find out what the actual demand is for unemployment benefits?

It would not reflect how much society values unemployment benefits, it would reflect how much society weighted by tax contribution values unemployment benefits. You might be surprised to hear that those with large incomes who tend to pay a lot of income tax value unemployment benefits far less than those who actually need unemployment benefits to feed themselves. That's not an accurate representation of society's demand, its society's demand skewed in favour of the wealthy.

Why wouldn't the dept of unemployment benefits tell you? Why wouldn't your family member or friend tell you? Why wouldn't you know from the time when you were unemployed? This information is decentralized...and markets utilize far far far more decentralized information than non sequitur economies. Which is exactly why non sequitur economies are non sequiturs.

Yeah, great, I can attempt to decide how much of my taxes to give to the unemployed based on what the department responsible for distributing those benefits thinks it should get (the answer is always 'more') or based on anecdotes. That's a bloody stupid system for setting a budget and I should know seeing as I set them for a living.

No, I'm advocating that we shop for ourselves in the public sector.

No two private goods provide you with the same exact benefit. It's the same exact concept with public goods. The difference is...with public goods...the benefit is shared. If you derive a lot of benefit from contributing to public education...then people who also value public education would also benefit from your contribution. And who else should be in charge of determining exactly how much money public education should receive if not the people who value public education?

But what if everybody who has received a public education is unemployed? Obviously that's not the case...but it's necessary that we think along these lines. If our taxes are being used to churn out people with degrees that have absolutely no relevance to the actual labor demands for our society...then that's a problem. And tax choice would reveal the extent of this problem because obviously unemployed people wouldn't be directing very much money to public education. Then, people who valued public education would have to figure out what has to be changed for public education to educate the public in such a way that the public actually benefits. If their changes generate more revenue for public education...then they are on the right track. If their changes generate less revenue for public education...then they are on the wrong track.

What if the people who value public education and provide its funding don't care how employable people are after they leave education?

In a market system...when we give our money to an organization...we are saying that we want that organization to be able to use more of society's limited resources. We all gave our money to Bill Gates which is why he can use far far far more of society's limited resources than you or I can. But the system works because clearly we value how he is using society's limited resources. We value how he is using a good portion of our brightest minds. And if we stop valuing how he is using society's limited resources...then we'd stop giving him our money.

If we created a market in the public sector...then people would be able to use their tax dollars to indicate which government organizations should be using more of society's limited resources. Yes, Bill Gates definitely has more of a say than us...but that's because WE all agree that he SHOULD have more of a say than us. We all agree that we value how he is using society's limited resources in the private sector. So if we benefit from his freedom to indicate which private organizations should be using more of society's limited resources...then why wouldn't we benefit from his freedom to indicate which public organizations should be using more of society's limited resources?

Where does he think the bottleneck is in the public sector? Which link in the chain does he perceive to be the weakest? Markets allow resources to flow to where they create the most value. If we want far more value as a society...then we should create a market in the public sector. From my perspective, the absence of a market in the public sector is our weakest link.

Just because someone is using their resources competently in the private sector does not mean that they will use their resources competently in the public sector. The place where Bill Gates or any other billionaire thinks that resources are most needed is in no way the place that society thinks that resources are most needed. Would you let Bill Gates decide what your grocery list ought to be for the next week, simply because he is successful at running a software company? Particularly if he decided that instead of food you should buy a dozen copies of Windows 7 this week.

[Shnercropolis]

Funny, because Jesus said himself that people should pay their taxes.

[Xerographica]

Funny, because Jesus said himself that people should pay their taxes.

But what if taxpayers could choose where their taxes go?

[Greed and Death]

Worth pointing out that despite technically running a country, the pope does not know how to run a country.

You see from a practical stand point Vatican city is small enough to be ran off of a trust fund, and it more or less is ( Whether the church's treasury is a trust fund is debatable but it is still an income stream).

With the possible exception of a handful of other micronations this does not work for anyone else.

[Oneracon]

Funny, because Jesus said himself that people should pay their taxes.

But what if taxpayers could choose where their taxes go?

For the same reason that direct democracy doesn't work in a developed nation, the issues and their backgrounds are too complicated for the average person to be expected to understand all of them to make an informed decision.

[Greed and Death]

Funny, because Jesus said himself that people should pay their taxes.

The pope did not say people should not pay taxes, further did not say in a democracy that people give up objecting to where tax money goes.

[Cosmopoles]

Funny, because Jesus said himself that people should pay their taxes.

But what if taxpayers could choose where their taxes go?

You would end up with a similar level of chaos and poor planning that would occur if a business asked its customers to choose how much of the profit derived from their purchases should be assigned to each department.

[Xathranaar]

Tonight, on Fox News: The Pope declares war on taxes. All Fox News anchors hereby pledge to join the Opus Dei.

"To kill and IRS agent is not a sin!"

[Infactum]

But the person who is paying for the public goods is not the same as the person who is receiving the public goods. If I choose to direct my taxes to unemployment benefits I don't see the direct benefit because I'm not unemployed.

As I mentioned in my OP...the state is the new god...and we put our lives in the state's hands. With religion, there's prayer and sacrifice. The prayer communicates your concerns/wants/needs and your sacrifice communicates the intensity of your concerns/wants/needs.

It's a matter of anxiety and uneasiness...the same principle behind insurance. If you're worried about losing your job...then you can help decrease your anxiety by giving your taxes to unemployment. If your family member has lost their job...then you can help decrease your anxiety by giving your taxes to unemployment.

And you see, here is your central problem. Peoples' "worry" over losing their job does not correlate very well with the probability that they will lose their job. People, on average, do not make decisions that involve risk rationally. Only "Market firms" can even claim to approximate this, and they still often fail.

Potential job loss also tends to overwhelm their thoughts on other matters. If I'm about to get layed off (say on April 13th), I will definitely consign all of my taxes to unemployment benefits (Unless you can convince me that a human would not do this, I will take this as an assumption). In doing so I ignore very real threats to my well being - roads, health and safety regulations, consumer regulations, fire departments, etc. Moreover every person making this decision will think the same, and there is a real chance of severely under-funding one of these things resulting in large amounts of death or at least a significantly decreased economic output. This is the central information problem - it is not that the market lacks access to decentralized information - it is that it lacks access to useful information.

In this case the useful information would be "how much the roads need" and "what percent of everyone else's taxes are going to roads." The second one cannot be decided until all taxes are collected and therefore is a piece of information that only a central dispersal agency could have.

... snip....

No two private goods provide you with the same exact benefit. It's the same exact concept with public goods. The difference is...with public goods...the benefit is shared. If you derive a lot of benefit from contributing to public education...then people who also value public education would also benefit from your contribution. And who else should be in charge of determining exactly how much money public education should receive if not the people who value public education?

But what if everybody who has received a public education is unemployed? Obviously that's not the case...but it's necessary that we think along these lines. If our taxes are being used to churn out people with degrees that have absolutely no relevance to the actual labor demands for our society...then that's a problem. And tax choice would reveal the extent of this problem because obviously unemployed people wouldn't be directing very much money to public education. Then, people who valued public education would have to figure out what has to be changed for public education to educate the public in such a way that the public actually benefits. If their changes generate more revenue for public education...then they are on the right track. If their changes generate less revenue for public education...then they are on the wrong track.

And here is another problem. The people who value public education are precisely those less able to contribute to it. The only people that derive an economic benefit from public education are parents and kids.* All others contributions are dependent on "charity" (people failing to maximize their own tangible profits for an emotional benefit). Parents tend to be young and they have kids, both of which contraindicate their ability to pay a large amount of tax (and thus have their preference heard). Similarly, the people worried about needing welfare are probably those least equipped to fund it.

*Large tech companies may also benefit from higher education - but this is a second order effect. That is, they will not see a problem for decades if they defund education. And markets are absolute crap at reacting to what will happen multiple decades in the future - see global warming if you are not convinced. Also, see the fact that recessions and depressions happen. This problem with the markets is normal, as they are made of humans who have the same blindness.

In a market system...when we give our money to an organization...we are saying that we want that organization to be able to use more of society's limited resources. We all gave our money to Bill Gates which is why he can use far far far more of society's limited resources than you or I can. But the system works because clearly we value how he is using society's limited resources. We value how he is using a good portion of our brightest minds. And if we stop valuing how he is using society's limited resources...then we'd stop giving him our money.

If we created a market in the public sector...then people would be able to use their tax dollars to indicate which government organizations should be using more of society's limited resources. Yes, Bill Gates definitely has more of a say than us...but that's because WE all agree that he SHOULD have more of a say than us. We all agree that we value how he is using society's limited resources in the private sector. So if we benefit from his freedom to indicate which private organizations should be using more of society's limited resources...then why wouldn't we benefit from his freedom to indicate which public organizations should be using more of society's limited resources?

Where does he think the bottleneck is in the public sector? Which link in the chain does he perceive to be the weakest? Markets allow resources to flow to where they create the most value. If we want far more value as a society...then we should create a market in the public sector. From my perspective, the absence of a market in the public sector is our weakest link.

Here you are assuming that the effect is, for lack of a better term, linear, when it is not. We value Bill Gates in as much as he is able to create and distribute a standardized operating system. This, however, says nothing of his ability to allocate public goods in a way that maximizes value - perhaps he isn't so great at that. Really he could only maximize his own value (And I dispute that as an absolute truth, but lets assume it). Bill Gates does not really act like a firm (He started a club whose members give away half of their fortunes), but lets assume he did. His entire set of taxes would go towards things relevant to his interests (Perhaps antipiracy, training a generation of people who did nothing but code backwards compatible c, maybe defunding antimonoply laws). Then he would benefit, but people as a whole would not see this benefit - part of the reason he does so well is that the OS market is particularly inefficient - so people are going to keep using windows, and he won't have to lower his prices.*

*The OS market, by the way, is an excellent example of a "free" market that tends towards inefficiency. The switching cost of an OS is incredibly high (and gets higher the more you use your computer), so the market will tend towards monopoly. If you want proof, examine the lack of nvidia drivers for Linux.


OK, lets, for a moment, sweep all of the above under the rug and assume that everyone can precisely compute the value that each and every public good has to them relative to their taxes. Lets even ignore the fact that the system you propose turns the tax system into a prisoners dilemma and necessarily fails to provide important information. Even stipulating all of that: How long would it take each person to compute this? Remember, they have to compute the probability that they will need each government service in the next year (there are at least 10^3 and I suspect its greater that 10^4). They have to integrate everything that might happen to them and how that interacts with the myriad possible services available. Even if they could, it would certainly take months (I suspect it would take more than a year, but I'm not sure). There is no way around this. If you propose a firm that advises people, then you have centralized the decision making process again (like a government, but without the purpose of making life better for people and with less accountability).

[Xerographica]

It would not reflect how much society values unemployment benefits, it would reflect how much society weighted by tax contribution values unemployment benefits. You might be surprised to hear that those with large incomes who tend to pay a lot of income tax value unemployment benefits far less than those who actually need unemployment benefits to feed themselves. That's not an accurate representation of society's demand, its society's demand skewed in favour of the wealthy.

And what does the distribution of wealth reflect? The next time you spend your money...ask yourself whether your goal is to evenly distribute money...or to maximize your benefit.

Yeah, great, I can attempt to decide how much of my taxes to give to the unemployed based on what the department responsible for distributing those benefits thinks it should get (the answer is always 'more') or based on anecdotes. That's a bloody stupid system for setting a budget and I should know seeing as I set them for a living.

Here I am trying to persuade you to donate your time/money to the tax choice movement. This is a "bloody stupid system" for determining how society's limited resources should be used?

What if the people who value public education and provide its funding don't care how employable people are after they leave education?

Earlier you argued that the wealthy don't value unemployment benefits and now you're arguing that the wealthy might fund public education with complete disregard for its efficacy. You're always going to strike out if you assume that there's a correlation between wealth and values. That's like assuming that there's a correlation between religion and morality.

Just because someone is using their resources competently in the private sector does not mean that they will use their resources competently in the public sector. The place where Bill Gates or any other billionaire thinks that resources are most needed is in no way the place that society thinks that resources are most needed. Would you let Bill Gates decide what your grocery list ought to be for the next week, simply because he is successful at running a software company? Particularly if he decided that instead of food you should buy a dozen copies of Windows 7 this week.

You're not thinking things through. We all give our money to Bill Gates. Why? Because we value how he is using society's limited resources. If we didn't benefit from how he was using society's limited resources then we wouldn't give him our money. It's as simple as that.

What do groceries have to do with Bill Gates? If you want to talk about groceries then talk about John Mackey. Why does he have so much money? It's simply because so many people value how he is using society's limited resources.

What happens when we allow Bill Gates and John Mackey to spend their taxes in the public sector? We end up with far far far far far far far more value. It's ridiculous how much more value would be created.

This is really easy to prove. Just reach deep into your pockets, ignore your priorities and preferences, and SPEND SPEND SPEND. But I know that you won't do this. You know why? Because you're not crazy. And that's why I advocate tax choice.

So...am I crazy for believing that you're not crazy?

[Cosmopoles]

And what does the distribution of wealth reflect? The next time you spend your money...ask yourself whether your goal is to evenly distribute money...or to maximize your benefit.

It reflects many things. It does not reflect how much certain people have a better understanding of how the government should spend its revenue.

Here I am trying to persuade you to donate your time/money to the tax choice movement. This is a "bloody stupid system" for determining how society's limited resources should be used?

Absolutely. Try suggesting that businesses allow their customers to set their budgets and see how many think that's a good idea.

Earlier you argued that the wealthy don't value unemployment benefits and now you're arguing that the wealthy might fund public education with complete disregard for its efficacy. You're always going to strike out if you assume that there's a correlation between wealth and values. That's like assuming that there's a correlation between religion and morality.

I didn't say the wealthy would fund public education. Just the people who value it.

You're not thinking things through. We all give our money to Bill Gates. Why? Because we value how he is using society's limited resources. If we didn't benefit from how he was using society's limited resources then we wouldn't give him our money. It's as simple as that.

And if Bill Gates didn't spend the money that we give him in a way that benefits Bill Gates he wouldn't still be wealthy.

What do groceries have to do with Bill Gates?

Absolutely nothing, which is my point exactly. What do unemployment benefits have to do with Bill Gates? Or military spending? Or environmental protection? Or many other areas of government spending?

If you want to talk about groceries then talk about John Mackey. Why does he have so much money? It's simply because so many people value how he is using society's limited resources.

What happens when we allow Bill Gates and John Mackey to spend their taxes in the public sector? We end up with far far far far far far far more value. It's ridiculous how much more value would be created.

This is really easy to prove. Just reach deep into your pockets, ignore your priorities and preferences, and SPEND SPEND SPEND. But I know that you won't do this. You know why? Because you're not crazy. And that's why I advocate tax choice.

I'm not disputing that people have priorities and preferences. I'm disputing that the priorities and preferences of society are more accurately represented in individuals based on their level of income, which is a ridiculous non-sequitur. As I said, try suggesting that businesses allow their customers to set their budgets and see how many think that's a good idea.

[L Ron Cupboard]

I think the OP is trying to invent Economic Creationism.

[Trustopia]

https://i3.ytimg.com/vi/j6sbVjL1sXA/mqdefault.jpg

[Xerographica]

In this case the useful information would be "how much the roads need" and "what percent of everyone else's taxes are going to roads." The second one cannot be decided until all taxes are collected and therefore is a piece of information that only a central dispersal agency could have.

We don't exist for the roads...the roads exist for us. The "optimal" funding for roads can only be determined by exactly how much each and every one of us values roads. Read up on preference revelation.

Logistically speaking, at anytime throughout the year you could go directly to the EPA website and make a tax payment. They'd give you a receipt and you'd submit all your receipts to the IRS by April 15.

And here is another problem. The people who value public education are precisely those less able to contribute to it.

If the public education system is neither producing taxpayers nor producing the people that taxpayers hire...then it could hardly be considered a "public" good.

Here you are assuming that the effect is, for lack of a better term, linear, when it is not. We value Bill Gates in as much as he is able to create and distribute a standardized operating system. This, however, says nothing of his ability to allocate public goods in a way that maximizes value - perhaps he isn't so great at that.

A public good, like a private good, is simply an input. Microsoft depends on an optimal quantity of X private goods and Y public goods in order to maximize productivity. Who, better than Bill Gates, knows what goods his company needs to maximize productivity? Do you think congress knows better than he does where the bottlenecks are in his operations?

Even stipulating all of that: How long would it take each person to compute this? Remember, they have to compute the probability that they will need each government service in the next year (there are at least 10^3 and I suspect its greater that 10^4). They have to integrate everything that might happen to them and how that interacts with the myriad possible services available. Even if they could, it would certainly take months (I suspect it would take more than a year, but I'm not sure). There is no way around this. If you propose a firm that advises people, then you have centralized the decision making process again (like a government, but without the purpose of making life better for people and with less accountability).

Like I said, taxpayers would be able to directly allocate their taxes at anytime throughout the year. So what I'm advocating is the creation of a market in the public sector. Taxpayers' demand (preferences) for public goods would shape the supply of public goods.

[Xerographica]

Absolutely nothing, which is my point exactly. What do unemployment benefits have to do with Bill Gates? Or military spending? Or environmental protection? Or many other areas of government spending?

We all buy the things that have to do with us. This is how we ensure that we have an optimal amount of food and an optimal amount of clarinets. If we can't accurately communicate exactly how much something has to do with us...then we end up with too much national defense and not enough public healthcare. In other words, we end up with the wholesale destruction of value.

Try suggesting that businesses allow their customers to set their budgets and see how many think that's a good idea.

Obviously that would be a stupid idea...which is why that's not what I'm proposing. The problem is that you see the government as one business that producers multiple products. It's not ONE business...it's multiple businesses. That's why we refer to it as the public SECTOR. Half of our nation's revenue is spent in the private sector and the other half is spent in the public sector.

In the private sector we choose whether or not we give our money to Microsoft. Our choices determine exactly how much revenue Microsoft receives...but it's completely up to Microsoft to decide how it spends its revenue. If it decides wisely then it will receive more revenue. If it doesn't...then it will lose revenue.

In the public sector though...it's up to congress to decide exactly how much revenue the EPA receives. Except, we are the only ones who know exactly how much we value environmental protection. If you want to argue that congress can reach into our hearts and minds and divine exactly how much we all value the environment...or if you want to argue that they know better than we do...then why not just have them spend ALL our money? If you truly believe that they create more value than we do...then why wouldn't you want more value to be created?

Read up on preference revelation.

[Cosmopoles]

Obviously that would be a stupid idea...which is why that's not what I'm proposing. The problem is that you see the government as one business that producers multiple products. It's not ONE business...it's multiple businesses.

No, its not. It has a single hierarchical structure with various departments and a single annual budget governing the entire entity. There is one chief executive uniting the entire structure. It bears no relation to mutliple businesses other than within your own mind because you just realised that if you applied the same principles you advocate here to a private business it would be an utterly stupid idea.